Depa Limited Q1 2009 trading update

Depa saw first quarter revenue and profit growth of over 40% compared to the same period last year.

The Company confirms that it is still on target to achieve approximately 30% revenue and profit growth for the full year 2009, a significant amount of which is expected to come from Abu Dhabi, Saudi Arabia and Asia.

The business is highly seasonal with a substantial portion of contract income being recognised in the second half of the year.

This cyclicality in revenue recognition is a characteristic of the interior contracting sector as the end of the fiscal year is usually used as contract deadline by clients.

Depa is taking steps to reduce this cyclicality and has seen significant improvement in this regard, as illustrated by the substantial revenue and profit growth this quarter, which is a higher proportion of expected annual results than previous years.

Depa is performing well and the business continues to have a strong contracted backlog of approximately Dhs3.2bn as of 31 March 2009.

In line with its strategy, Depa continues to diversify revenues and reduce dependence on the Dubai market. Projects that have been delayed do not account for more than 4% of the December backlog and are not accounted for in the overall backlog number issued for the first quarter. No client or contract accounts for more than 8% of the current backlog.

This backlog consists entirely of projects that are already at the advanced construction stage. Being at the end of the development chain, Depa typically moves on site to finish the building for occupation and hence, at a stage where the project is extremely unlikely to be cancelled, such as Burj Dubai. Payments from clients have not deteriorated and remain in line with historical practices.

Depa continues in its strategy of reducing dependence on the hospitality sector. The Company is increasingly focused on the refurbishment and infrastructure sectors, which are counter-cyclical in a downturn. Depa is currently carrying out refurbishment works for airports across the region and is on target to complete fit out works for the Dubai Metro later this year.